Correlation Between Skue Sparebank and Cambi ASA
Can any of the company-specific risk be diversified away by investing in both Skue Sparebank and Cambi ASA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Skue Sparebank and Cambi ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skue Sparebank and Cambi ASA, you can compare the effects of market volatilities on Skue Sparebank and Cambi ASA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Skue Sparebank with a short position of Cambi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skue Sparebank and Cambi ASA.
Diversification Opportunities for Skue Sparebank and Cambi ASA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skue and Cambi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Skue Sparebank and Cambi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambi ASA and Skue Sparebank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Skue Sparebank are associated (or correlated) with Cambi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambi ASA has no effect on the direction of Skue Sparebank i.e., Skue Sparebank and Cambi ASA go up and down completely randomly.
Pair Corralation between Skue Sparebank and Cambi ASA
Assuming the 90 days trading horizon Skue Sparebank is expected to generate 3.17 times less return on investment than Cambi ASA. But when comparing it to its historical volatility, Skue Sparebank is 2.64 times less risky than Cambi ASA. It trades about 0.07 of its potential returns per unit of risk. Cambi ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 578.00 in Cambi ASA on November 2, 2024 and sell it today you would earn a total of 1,012 from holding Cambi ASA or generate 175.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skue Sparebank vs. Cambi ASA
Performance |
| Timeline |
| Skue Sparebank |
| Cambi ASA |
Skue Sparebank and Cambi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skue Sparebank and Cambi ASA
The main advantage of trading using opposite Skue Sparebank and Cambi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skue Sparebank position performs unexpectedly, Cambi ASA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cambi ASA will offset losses from the drop in Cambi ASA's long position.| Skue Sparebank vs. Melhus Sparebank | Skue Sparebank vs. Sparebanken Ost | Skue Sparebank vs. Sparebanken Sor | Skue Sparebank vs. Elkem ASA |
| Cambi ASA vs. Aker Horizons AS | Cambi ASA vs. Hexagon Purus As | Cambi ASA vs. Huddly AS | Cambi ASA vs. Agilyx AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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